No green credit across the border

By Stephanie Peatling, Environment ReporterNovember 22 2002

The NSW Government has tightened legislation requiring energy providers to reduce their greenhouse gas emissions.

By removing provisions acknowledging investment in "clean forms" of power interstate, the Government will ensure companies investing in forest sinks for carbon credits will have to choose projects in NSW.

Under the legislation's original conditions, power companies would gain credit for reducing emissions by investing in so-called clean coal in Queensland and South Australia.

The legislation, which comes into force on January 1, calls for power companiesto reduce their emissions by 5 per cent on their 1990 levels by 2007, and then maintain those levels for a further five years.

The Minister for Energy, Kim Yeadon, described the scheme as "revolutionary in terms of greenhouse policy".");document.write("

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He said it could be a model for other states to adopt in lieu of the Federal Government ratifying the Kyoto protocol.

"We have a policy vacuum from the Federal Government and we are not prepared to sit back on our hands and have a whinge," Mr Yeadon said.

"We encourage the Federal Government and other states and territories to join with us in tackling greenhouse in a co-ordinated and least-cost way."

The executive director of the Nature Conservation Council of NSW, Kathy Ridge, said the changes meant "a whole lot of hot air has been taken out of the scheme".

But more work needed to be done to encourage companies to look at demand management if larger gains in efficiency were to be achieved.

The changes come as the Premier, Bob Carr, is trying to convince the states of the benefits of ratifying the Kyoto protocol on climate change.

Earlier this week, Mr Carr established a panel, backed by the Victorian and South Australian premiers, to challenge the Federal Government's position that ratifying the protocol is not in the national interest. But the premiers of Queensland and Western Australia still have reservations about the international agreement.

The NSW scheme could lead the way for a national emissions trading system, a recommendation that was made to the Federal Government last week in a draft report on the national electricity market written by the former resources minister, Warwick Parer.

The Parer report said the competing national and state approaches to reducing greenhouse gas emissions were ad hoc, expensive and poorly targeted, and called for a national system.

Rupert Posner, from the Business Council for Sustainable Energy, said the scheme would be welcome news for the emerging alternative energy sector. "Not only will it lead to a reduction in greenhouse gas emissions but it will also provide support and assistance for the alternative energies," he said.